CH 8

Claim Adjusting

The insurer function that handles demands for claim payments.

CH 8

Adjuster or Claim Representative

A person responsible for investigating evaluating and settling insurance claims.

CH 8

Independent Adjuster

Adjusters who handle claims on a case-by-case basis for a fee and who are not employees of insurers.

CH 8

Public Adjuster

Adjusters who represent policyholders to negotiate a settlement with the insurer in exchange for a fee or a percentage of the settlement.

CH 8

Reservation of Rights Letter

A letter providing notice to the insured that the insurer is investigating a claim that is issued to inform the insured that a coverage problem might exist, and that protects the insurer so it can deny coverage if necessary.

Ch 8

Nonwaiver agreement

An agreement that is signed by the policyholder and that indicates that the insurer may investigate a claim while reserving the right to deny coverage if necessary.

Ch 8

Declaratory judgement

A ruling by a court to determine whether an insurance policy provides coverage.

Ch 8

Legal Liability

The legal responsibility of a person or an organization for bodily injury or property damage suffered by another person or organization.

Ch 8

Special Damages

Compensatory damages awarded for specific out-of-pocket expenses, such as doctor and hospital bills.

Ch 8

General Damages

Compensatory damages awarded for losses, such as pain and suffering, whose monitary value cannot be documented easily.

Ch 8

Extra-contractual Damages

Ch 8

Defense and cost containment expenses

Costs of adjusting a claim that can be assigned to a specific claim.

Ch 8

Adjusting and other expenses incurred

Costs of adjusting a claim that relate to the overall operation of an insurer's claim function.

Ch 8

Adjustment method

A case reserving method in which the amount that will eventually be paid to settle the claim is estimated by a claim adjuster or another claim specialist.

Ch 8

Average value method

A case reserving method that establishes a predetermined dollar amount of reserve for each claim as it is reported.

Ch 8

Tabular method

A case reserving method that establishes an "average" amount of all claims that have similar characteristics in terms of the claimant's age, health, and marital status.

Ch 8

Stair-stepping

Incremental increases in claim reserves by the claim representative without any significant change in the facts of the claim.

Ch 8

Alternative dispute resolution (ADR)

Methods used to settle claims that avoid litigation.